With politicians crowing while the greens cry foul, what's the real outcome of Europe's climate deal? The buying and selling of permits to pollute - the EU Emissions Trading Scheme - is meant to be the main mechanism by which Europe drives down its greenhouse gas emissions. But today's pact changes this.

The ETS has had a rocky start since its launch in 2005 and its impact has now been further watered down. In fact, the rules have been drafted with such complexity that it is virtually impossible to say for sure whether it will have any impact at all going forward.

So emissions trading is essentially relegated to an accounting process, while the real heavy lifting is done by more policies like subsidies for renewable energy and efficiency standards.

This demonstrates elegantly how measures which seek to curtail activities causing emissions - like ETS - are a lot tougher to sell than those designed to incentivise investment in cleaner technologies. The UN negotiators working towards a global deal next year should take careful note.

The grand irony is that the European package could deliver serious cuts in emissions - but only if a comprehensive global deal is reached in the next few years. That's because a global deal will trigger an increase in Europe's commitment from 20% to 30% and reduces fears about "carbon leakage" - industry shifting to countries without carbon caps.

And yet this package was meant to convince the world that Europe was serious and thereby make it easier to reach that global deal. The circular nature of this argument would be funny if it weren't for the fact that a lot of time has been wasted developing the ETS as a show case carbon trading, only to find Europe's leaders are incapable of finding the political will to do it properly unless everyone else does it too.

The most disagreement and the biggest concessions revolved, unsurprisingly, around how the pollution permits will be handed out. It was always going to be complicated but today's agreement is particularly complex. It will take a long time to fully analyse and the Commission has bought itself some time to do a proper assessment of how it all pans out it will then make recommendations on the effort sharing - but not until March 2011.

Yet it is not all doom and gloom. With ETS, we have at least invented a set of brakes for the juggernaut of our rising carbon emissions - they are complicated and we're not sure if they will work but we can at least continue testing them and hit them hard as and when the global political will is found to truly solve this problem.